Presentation that I used in 2012 and 2013 to inform several foreign delegations (a.o. South Korea, Taiwan, Malaysia) on Dutch agriculture

1. Technology Intensive Agriculture:
The Netherlands’ Experience
Presentation used in 2012 and 2013 for several
international delegations visiting the Netherlands
Krijn J. Poppe

2. Content of the presentation
 Challenges in food security: technology needed
 The performance of Dutch agriculture and food industry
 Explanations of the Dutch success
 GRIN technologies determine the future
 European and Dutch innovation policies
2

3. Foresight(s) 2050: Scarcity & Transition
The food security issue: Can we feed 9 billion (with higher
income levels) with less environmental impacts?
The debate focuses on scarcities:
• Climate change (and the role of livestock)
• Environmental impact and biodiversity loss, eco
system services
•
•
•
•
•
3
Energy supply, biobased economy
Phosphate supply
Water availability
Declining productivity
Resistance to industrialisation of agriculture in
Western countries (incl. animal welfare issues)

4. The end of declining food prices?
© Niek Koning et al. Wageningen UR
Food index

5. EU’s SCAR Foresight: two narratives
Productivity:

Science has the potential to develop technologies that can boost
productivity whilst addressing resource scarcities and environmental
problems

Massive investments needed in R&D, technology adoption, rural
infrastructure, access to markets

GRIN technologies (Genetics, Robotics, Informatics, Nano)
Sufficiency:

Science has the potential to develop technological solutions that are
productive, reduce resource use, preserve biodiversity

However, demand increases need to be mitigated, through behavorial
change, structural changes food systems

Appropriate governance structures to internalise externalities

6. It is clear we need high tech: the delta of
the Netherlands can be an interesting case

7. NL: a city state and a big agricultural exporter
United States
Netherlands
France
Australia
Argentina
Brasil
Denmark
Thailand
Total import value
Total export value
Net trade value
New Sealand
Ireland
Algeria
Saoudia-Arabia
Taiwan
Hongkong
South-Korea
Italy
Russian Federation
United Kingdom
Germany
Japan
-60
-40
-20
0
20
40
60
80
Trade value in billion US$

8. Destination (%) of Dutch agricultural
exports, 2009

9. Land use in the Netherlands, 2006
42.000 km 2
agriculture
19%
nature and
forest
2%
built-on area
3%
55%
9%
traffic
recreation
12%
water

10. Agricultural land use, 2009 - 1.9 mln ha.
3%
3%
grassland
arable land
42%
52%
vegetables & fruit
flowers,ornamentals
and seeds

11. Location of the dairy farms and industry

12. Location of arable farming

13. Location of intensive livestock complex

14. Location of the vegetables and fruit sector

15. Location of the floriculture sector

16. Technical results / land prices
Milk production per cow: 8.000 kg
Cows per ha: 1.7
Wheat: 10 ton per ha
Piglets: 26.5 per sow per year
Land prices: 35.000 – 75.000 euro / ha

17. Agricultural holdings by type, 1985-2009
140000
120000
mixed
100000
pigs and poultry
80000
arable crops
60000
horticulture
40000
grassland based
livestock
20000
0
1985 1990 1995 2000 2009

18. Farm size in the EU, 2007
Belgium
Denmark
Germany
France
UK
acreage (ha)
Italy
economic size
(ESU)
Spain
Poland
Netherlands
EU-27
0
20
40
60
80
100
120

19. Distribution of total income / ag. household
100%
90%
80%
> 100.000
70%
60%
50%
50100.000
40%
25-50.000
30%
0-25.000
20%
10%
<0
0%
2001 2002 2003 2004 2005 2006 2007 2008 2009

20. value added Dutch agro complex, mrd euro, 2008
Distribution
import
Food Industry
import
6.3
8.9
Supply
import
5.2
3.3
4.6
6.9
Ag Services,
Forestry
10.6
4.7
Inland supply
20
Distribution
inland
Food Industry
Inland
Primary
Agricutlure
Total € 50,4
bln. (9,5%),
incl. 20,4
based on
imports;
685.000
annual
labour units

21. Innovation as basis for competitiveness
R&D expenditure as % of value of production in food products, beverages and
tobacco
0.8
0.7
0.6
0.5
1992
1997
2002
2007
0.4
0.3
0.2
0.1
0
21
NL
Dk
D
F
USA
PM 2007:
High prices

22. Delta with good
soils
High level of
knowledge
Climate, light
Specific Competences
Investments
Efficiency of scale
Social capital
International
oriented
Infrastructure
rural area
New land
(polders)
Homogeneous,
highly educated
population
Cheap (water)
transport
Knowledge
system
Breeding
material
Large NW
European
consumer market
Diversity in
production +
trade: complete
offer
Lobbying power
Cooperatives
Efficient capital
market
Competitive
advantage
The model of value creation
for Dutch agriculture
High productivity
and low cost
price
Supportive
general policy
High volume
Good in productdifferentiation
High Marketshare
Financially
healthy
Cheap capital
Important in
export en GDP
High land prices
Strong export
position
image abroad
High wages
Environmental
issues: pressure
to innovate
Multifunctional
landscape
Results
(c) Poppe et al, 2009

23. Agricultural Knowledge and Innovation Systems
commodity boards: cofinance
Wageningen University and
Research centre: university,
innovation driven applied
research and 2 experimental
stations
Extension service
(privatised),
agribusiness –
advise and
accounting offices
University Utrecht –
Veterinary science
TNO (-Applied Food
Research)
Government: clear
regulations, system
responsibility
RABObank
Agribusiness (coops and
investor owned firms)
Demanding consumers
23
Highly educated farmers
Agricultural Schools
(managed by
Ministry of
Agriculture)

24. Public-Private Research partnerships –
(‘a golden triangle’ from the polder)
Research
A golden
triangle
Business
Government

25. Our agro-innovation system and theory
 Innovation happens in a social system: “an institutional
clustering of practices among the participants (not
necessarily implying consensus)” (Anthony Giddens)
 Long-term infrastructural investment in ‘mental capital’
and its improvement is crucial for successful economic
development and for competitive trade performance (Chris
Freeman for OECD, quoting List, Keynes, and investigating historical cases in Europe and Asia)
 ‘Coupling mechanisms’ between the education system,
scientific institutions, R&D facilities, production and
markets have been an important aspect of the
institutional changes introduced in successful ‘overtaking’
countries. (Freeman)
 Dutch agro-innovation system: PPPartners, linking
principles en connection mechanisms (process design)
25

26. Linking public and private interests
Knowledge
Linking principles:
• Openness
• Proximity
• Synergy
• Absorption capacity external info
Institutes
Gover
nment
NGO’s
Busin
esses
Intermedi
ates
26
Connection mechanisms:
• Fora like Knowledge rooms etc.
• Strategic agenda sector
• Strat. Knowledge & Innovation
Agenda
• Public-private investments
• Supporting institutional changes

27. Part 4: GRIN Technologies
 Genetics
 Robotics
 ICT – information and communication technologies
 Nano technology
27

28. How more data contributes to current business models
Input industries
Software
Provider
Farmer
Transport
GRIN
Small
Feed the growing world
Food processor
Transport
Cost price
Service
Sustainability
Precision Farming:
better control
Better management
decision
Sophisticated
Technology,
More advise
Logistics
solution
providers
Retail / consumer
Transport
cope with retail
loyalty
Food Safety
Health
Segment
products and
input suppliers;
Benchmark with
competitors
Better service concepts, e.g. in
store replenishment
Consumer
decision support
(pre- and after
sales)

29. Organisational arrangements in the food
chain are changing
Programmability
Low
High
Asset specifity Low
High
Low
spot
long-t.
spot
joint
market
contract
mrkt
venture
cooperation
coop./
vertical
inside
contract
vertical
owner-
High
Contribution
partners
separable
High
Low
© Boehlje
ownership
ship

30. Development of farm systems
Net value
/ ha
Ag. policy
Family
farming
AKIS.gov
Subsistence
farming
Latifundia
socialist
state
farms
Agricultural
Family
Firms
(sme)
3rd gen. uni
Urban
farming
Residen
-tial
farming
Time
Metropolitan agriculture
Food supply networks

31. Scenarios: qua vadis?
Strong government
Conserve
Develop
Room for markets and networks
(c) Poppe et al, 2009

32. Part 5: Innovation policies
 The EU and Dutch government try to increase the level of
innovation
 For economists and others: 2 views on innovation policy
A recent report on Agricultural Knowledge and Innovation
Systems is available (see EU’s website SCAR)
32

33. Increased relevance in EU policy:
•
Europe 2020 strategy: growth strategy for the coming decade. It
wants the EU to become a smart, sustainable and inclusive
economy.
•
The Innovation Union is one of the seven flagship initiatives of the
Europe 2020 strategy:
• turn Europe into a world-class science performer;
• remove obstacles to innovation
• revolutionise the way the public and private sectors work
together, notably through Innovation Partnerships
• Within the Innovation Union, Horizon 2020 is the financial
instrument 2014 to 2020, proposed budget €80 billion (the EU’s
new programme for research and innovation)
• CAP post 2013: Reinforce the role of the Farm Advisory Service
33
(FAS) and to create a ‘European Innovation Partnership (EIP) for
agricultural productivity and sustainability’.

34. Economics: thinking on equilibrium and dis-eq.
Adam Smith
•
•
•
•
•
•
•
34
Ricardo
Marshall
Walras
Coase
Hayek
Friedman
Ostrom
• F. List: infant industry
• K. Marx: role of capitalist
• J. Schumpeter:
entrepreneur / business cycle
• K. Arrow: market failure
• O. Williamson: Inst. Econ.
Ministry of Economic Affairs, Agriculture

35. Two views on innovation policy (Smits et al,
2010)
Mainstream macro-economics
Main assumptions
Equilibrium
Institutional and evolutionary
economics: Systems of Innovation
Dis-equilibrium
Focus
Perfect information
Allocation of resources for invention
Asymetric information
Interaction in innovation processes
Main policy
Individuals
Science / research policy
Networks and frame conditions
Innovation policy
Market failure
provide public goods
Systemic problems
solve problems in the system
mitigate externalities
facilitate creation new systems
reduce barriers to entry
facilitate transition and avoid lock-in
eliminate inefficient market structures
induce changes in the supporting structure
for innovation: create institutions and
support networking
context specific
Main rationale
Government intervenes
to
main strengths of
clarity and simplicity
policies designed under
analysis based on long term trends of
this paradigm
science-based indicators
involvement of all policies related to
innovation
holistic approach to innovation
difficult to implement
main weaknesses of
linear model of innovation
policies designed under
(institutional) framework conditions are not lack of indicators for analysis and evaluation
this paradigm
explicitly considered
of policy
35

36. Knowledge & Innovation System: 7 functions
1. Knowledge development and diffusion
2. Influence on direction of search and
identification of opportunities
3. Entrepreneurial
experimentation and
management of risk and uncertainty
4. Market formation
5. Resource mobilisation
6. Legitimation
7. Development of positive externalities
(c) M. Hekkert et al.
36

37. Agricultural Knowledge and Innovation Systems
An AKIS should be able to
propose and develop practical
ideas to support innovation,
knowledge transfer and
information exchange.
37
Policy needs to reflect the
manner in which innovation
actually occurs today: often
through diffuse networks of
actors who are not necessarily
focused on traditional research
and development.

38. The Food Chain Plays a Role too
38
SCAR Collaborative Working Group AKIS

39. Learning and Innovation Networks
 Thematically-focused learning networks that are made up
of different actors, within and outside the formal AKS.
 Members can include farmers, extension workers,
researchers, government representatives and other
stakeholders (Rudman, 2010).
 The emphasis is on the process of generating learning and
innovation through interactions between the involved
actors.
 LINSA: LIN for Sustainable Agriculture
 The difference between AKS and LINSAs is connected to
how knowledge is conceptualized: AKS sees knowledge as
a “stock to be transferred”, whereas LINSA emphasizes the
processes needed to make knowledge useful and
applicable to other actors.
39

40. Planned results:
• Tools and methods for practitioners that are involved in learning and innovation in
agriculture
• Recommendations on policy instruments and financial arrangements that
support learning and innovation for sustainable agriculture
• Concepts to reflect on learning and innovation processes as drivers of transition to
sustainable rural development
More information: www.solinsa.net; contact: heidrun.moschitz@fibl.org

41. Different motivations for research should
be recognised – and interaction managed
Science
Market
driven
R&D
Not a lineair model !
Innovation
in
partnership

42. Different objectives,
methods, and public
roles
Science
Market
driven
R&D
• Science for competitiveness or social
issues
• Business sets agenda, helps to steer,
uses results
• PRIVATE-PUBLIC PARTNERSHIPS
• Science driven
knowledge development
• Basic research
• Linear model
• Cross overs sectors
• Society sets agenda
• PUBLIC TASK
Innovation
in
partnership
•
•
•
•
•
Prototypes // Localisation
Change business models / finance
Food chain is co-creator
(De-)regulation, procurement etc.
LEARNING AND INNOVATION
NETWORKS
• INFORMATION BROKERS

43. Role of EU policy
Science
Market
driven
R&D
• Collaborate with
business in Food
Chain in PPP
• Manage spill overs
between EU regions
• Countries are too small, large
spill overs: pool funds
• Compete and collaborate with
US, China, Brazil etc.
• Help re-organisation process
in Europe (infrastructures)
Innovation
in
partnership
• AKIS are REGIONAL
• Innovation , not dissemination
• Organise international exchange for
spill-overs (farmers, extension)
• Empower innovation groups in CAP
• Don’t forget monitoring (learning)

44. Thank you for
your attention
krijn.poppe@wur.nl
www.lei.wur.nl